It is pretty remarkable how managed futures strategies are still only a tiny portion of the hedge fund industry given their near zero correlation to other assets and defensive characteristics.
Replies
I don't think it's that surprising. They are going to underperform in bull markets and people hate that and it's mostly been a bull market for a long time. But yes, they make sense as part of a portfolio if you can stand the potentially long periods of apparent uselessness.
aug 5, 2025, 7:33 pm • 1 0 • view
Uncorrelated assets only help risk-adjusted portfolio returns if they also provide at least mediocre returns over the long run. Most managed futures don’t tick this box.
aug 5, 2025, 7:32 pm • 1 0 • view
i have nothing but bad memories from owning managed futures in a previous job
aug 5, 2025, 7:35 pm • 1 0 • view
I use them as hedges and tactical/trading bets. As components of a buy and hold investment strategy it would be more efficient to use the cash spent on management fees to light a bonfire.
aug 5, 2025, 7:40 pm • 1 0 • view
Its not really the strategy thats a problem, its the structuring and fees. For instance a low cost index replication run at equity index vol instead of bond vol can generate good returns and diversification benefits. unlimitedfunds.com/considering-...
aug 6, 2025, 12:01 pm • 0 0 • view
Well indeed. When Vanguard deploys an automated low cost equity futures product that also somehow gets favourable terms rolling the contracts, I'm all ears. Until then I'm avoiding those fees.
aug 6, 2025, 12:41 pm • 0 0 • view